Board composition, Ownership structure and Firm performance

Abstract

Abstract The study primarily focuses on investigating the relationship between corporate governance and the firm performance. Board composition and Ownership structure are primarily taken as the factors of corporate governance, where as financial performance of the firm is measured with the financial ratios viz. Return on Capital employed, Return on the equity, Profit after tax and Return on assets. For the detail study purpose we have divided the board composition into two components a) Board size b) board composition. The study is based on the 121 small cap, mid cap and large cap companies listed on the Bombay Stock Exchange (BSE) India, for the period of 2010 -2011.Our empirical analysis of the data is suggestive of the result of that a relationship of positive and significant nature exists between board size & board composition and firm’s financial performance in India. We also found that there is no relationship exists between ownership structure and firm performance. Key words: board size, board composition, ownership structure, corporate governance, financial performance, India.